Kakao’s Founder, Kim Beom-su, is accused of conspiring to inflate Okay-pop company SM Leisure’s inventory value to stop a takeover by rival company Hybe Company.
Kim Beom-su Arrested in Reference to SM Leisure Inventory Scandal
South Korean prosecutors have accused Kim of working with a non-public funding firm to purchase numerous shares, value about ₩240 billion or US$173 million, in SM Leisure. The aim of shopping for these shares was to lift the corporate’s inventory value and forestall a rival firm, Hybe Company, from taking up SM Leisure.
Hybe cancelled its supply to purchase a 14.8 per cent stake in SM Leisure after the corporate’s inventory value jumped, enabling Kakao and its subsidiary to accumulate almost 40 per cent of the company.
Kim, also referred to as Brian Kim, has denied any wrongdoing and has not been formally charged. A courtroom official mentioned on Tuesday that the Seoul Southern District Court docket permitted the arrest warrant to stop the potential destruction of proof and since Kim was thought of a flight danger.
Based on a prosecution spokesperson, Kim is being held on the Seoul Nambu Detention Centre. His detention will last as long as 20 days, throughout which prosecutors will examine additional earlier than deciding whether or not to indict him, as per South Korean felony process.
Kakoa Corp, A South Korean Large Tech Firm
Kakao was based by Kim Beom-su in 2010. Kim had a 24% stake within the firm and was Korea’s richest man at one level, with a internet value estimated at greater than US$13 billion. Nevertheless, with the latest allegations and his subsequent arrest, his private wealth and the worth of his stake in Kakao might be considerably affected.
Kim launched KakaoTalk, a free cellular immediate messaging software for smartphones with textual content and name options, in 2010. Since then, it has change into the nation’s hottest messaging app, amassing 48.2 million Korean customers as of 2024. The corporate made an annual income of US$1.5 billion by the top of 2023.
Kakao has advanced right into a sprawling company empire valued at greater than $12 billion, with a enterprise portfolio spanning taxi-hailing companies, on-line banking, on-line purchasing, leisure administration and merchandise shops.
Aljazeera reviews that Kakao’s shares dropped greater than 5 per cent following the information of Kim’s arrest. Moreover, the end result of any case towards Kim might jeopardise the Kakao group’s management of the web financial institution arm KakaoBank Corp because the nation’s monetary guidelines prohibit these convicted of economic crime from proudly owning greater than a ten% stake in a financial institution. This potential lack of management might considerably impression Kakao’s future enterprise choices and operations.
Kakao can be prone to be topic to regulatory scrutiny, making it more difficult for the corporate to make main choices on investments in synthetic intelligence (AI) and abroad enterprise enlargement, business consultants instructed CNN. The corporate plans to introduce new AI companies this yr, however regulatory scrutiny might doubtlessly hinder these plans and the corporate’s future progress.
